The new Country Partnership Strategy covering FY 2007-2009 envisions a close cooperation with the Russian government for the realization of four primary objectives: (a) sustaining rapid growth, (b) improving public sector management and performance, (c) improving the delivery of social services, and (d) enhancing Russia's global role. The Bank will provide its assistance on the first three pillars increasingly at the regional level - working directly with regions using traditional and new Bank instruments. This is in line with the major tenets of the Bank Group's recently approved strategy for engagement with Middle Income Countries (MIC), in particular, a primary focus on providing global knowledge to Russia with active involvement of local academia and think tanks; development of a business model for fee-based services and analytical work implementation; selective use of IBRD financial services in support of critical institution building and piloting of investment finance frameworks at federal and regional levels; increasing emphasis on sub-national financing without sovereign guarantees; and enhanced Bank Group synergies through closer Bank-IFC collaboration on investment climate assessments and sub-national financing. The regional focus of the Bank program is meeting Russia's significant remaining development challenges which increasingly play out at the regional level. Such a regional focus is supported by the Federal Government and is timely as further implementation of reforms depends on the regions in many areas, and despite of budget surpluses on a federal level, many regions face considerable challenges and needs for improving the municipal services and infrastructure. In the course of an intensive dialogue, the following three priority areas for Bank support were identified by the regions: (i) technical assistance for public administration and municipal reform, introduction of performance management; (ii) financing of regional infrastructure and particularly roads programs, (iii) rationalization and upgrade of education and health services. Focused engagement in selected regions provides opportunities for scaling up and maximizing the impact of the Bank's resources. . Successful cooperation at the regional level though integrated programs that includes general analysis, diagnostics, and operations would provide models that can be expanded to other regions at a later date, with or without the direct participation of the Bank. In some areas the assistance that the Bank can offer the regions already represents a scaling up of lessons and experience of Bank cooperation at the federal level. Instruments The Bank intends to use a wide mix of instruments in assisting Russian regions. Traditional instruments which could be applied at the regional level involve: analytical and advisory activities, IBRD loans in support of federal programs, WBI capacity building activities; carbon financing; and grants.
Since 2007 the World Bank Group (WBG) has started direct cooperation with Russia’s regions and municipalities in the framework of the Regional and Municipal Development Program that was agreed with the Government of the Russian Federation. The Program is mainly using two new cooperation instruments: financial products without sovereign guarantees, and analytical and advisory work on a fee-for-service basis. I. FEE FOR SERVICE
FFS Brochure
Analytical work and advisory work is provided by the Bank on reimbursable basis including preparation of strategies and sector analyses for regions; technical support for specific investment activities. Analytical and advisory service arrangements are foreseen to provide Bank advice on project design and management for investment projects fully funded by the Federal and regional governments. Development of Public-Private Partnership (PPP) System: Advising the Government of the City of St. Petersburg on establishing a regional PPP Unit (expansion of Pulkovo Airport, and building of the Western High Speed Diameter, Orlovsky Tunnel, and Nadzemny Express projects), as well as managing the PPP projects; - Advising on development of a mid-term PPP-based management strategy for the Kazan airport;
- Advisory services to the Government of the Volgograd Oblast on establishing a PPP Unit (at the stage of negotiation).
Education: Health: Assistance to KMAO on healthcare delivery system restructuring and strengthening the institutional capacity for medical education and clinical research in the Okrug; Designing measures to strengthen healthcare system in the City of Kazan (at the stage of negotiation).
Social policy/assistance: Cooperation with the Tver Oblast on improving targeted social assistance (at the stage of negotiation); Advisory services to the Kalmyk Republic to improve social assistance efficiency (at the stage of negotiation).
Infrastructure development: Supporting the development of a Housing and Communal Services Strategy and Action Plan (2008-2012) in the City of Nizhnevartovsk; Designing a regional infrastructure development program for the Perm Krai (at the stage of negotiation).
Strengthening of regional administration capacity: Assistance on improving the Government's institutional structure and performance in the Khanty-Mansi Autonomous Okrug - Yugra, including a horizontal function review in executive authorities of the Okrug;
II. SUBNATIONAL LOANS
SNDP Brochure Several sub-national projects are being developed without sovereign guarantees, primarily focusing on regional infrastructure. Sub-sovereign lending by the Bank Group's Sub-National Development Program will be aimed at creditworthy regions and entities. The Program is managed jointly by IBRD and IFC. Health Infrastructure: A loan in the amount of RUR700 million to the Petropavlovsk-Kamchatsky Municipality to support capital investments in infrastructure development (roads, HCS, etc.); A guarantee in the amount of RUR230 million in support of the Chuvash Republic bonds issue. Proceeds from the bonds issue were used for the regional public infrastructure development; A loan in the amount of RUR1.3 billion to the Chuvash Republic in support of the regional road reconstruction and development project, with an emphasis on rural areas; A loan to the Bryansk Oblast for reconstruction of treatment facilities in the city of Bryansk (at the stage of negotiation).
In addition to the aforementioned projects implemented on a fee-for-service basis, the World Bank Group continues to support important sub-national studies using its own resources. The studies cover: factors of economic growth and competitiveness in the Tver Oblast and Perm Krai; a number of initiatives in the South Federal Okrug; a Doing Business review accompanied by a ranking of 10 Russian regions on conducive business environment.
The number of regions in the Russian Federation is too large (85 regions) for effective coordination and funding of Bank activities in regions across the entire country. The Bank has made progress with the federal government, in identifying a small sub-set of regions that may become the target of concentrated work programs with the Bank. Regions are being chosen from wealthier, middle income, and poorer areas. The Regional Program in Russia is being developed and coordinated by the World Bank Country Office in Moscow. As of today, 4 Subnational Loans have been approved, and 14 FFS Agreements signed in total with regions. |
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